The following shows the balance sheet for a bank. The manager wants to get an idea about the interest rate risk faced by her bank. She asks the research staff to conduct a basic gap analysis. She wants to know what will happen to the bank's profit if interest rate increases by 5 percent. Do you know the answer? Assets ($million) Liabilities & NW ($million) $100 Rate Sensitive Assets $40 Rate Sensitive Liabilities Variable-rate loans Variable-rate CDs Money market deposit accounts Short-term loans Short-term securities $50 $110 Fixed-Rate Liabilities Fixed-Rate Assets Checkable deposits Reserves Savings deposits Long-term loans torm securities Long-term CDs Short-term loans Money market deposit accounts Short-term securities Fixed-Rate Assets $110 Fixed-Rate Liabilities $50 Reserves Checkable deposits Long-term loans Savings deposits Long-term securities Long-term CDs Equity capital Bank profit will decrease by $2 million. Bank profit will increase by $5 million. Bank profit will increase by $2 million. Bank profit will increase by $3 million. Bank profit will decrease by $3 million. Bank profit will decrease by $5 million